The US Department of Commerce is preparing to propose a ban on the sale and import of smart vehicles that utilize specific technology from China or Russia. This decision is driven by national security concerns, according to US officials.
In a press conference call on Sunday, Commerce Secretary Gina Raimondo reported that a government investigation, launched in February, identified national security risks associated with the embedded software and hardware in US vehicles. These risks include potential remote sabotage via hacking and the harvesting of drivers’ personal data. “In extreme situations, a foreign adversary could shut down or take control of all their vehicles operating in the United States, all at the same time, causing crashes (or) blocking roads,” Raimondo stated.
A senior administration official informed CNN that the proposed rule would not affect cars already on US roads that have already installed Chinese software, as it would only ban new vehicles. The directive would take effect for vehicles of the “model year” 2027 for software and “model year” 2030 for hardware, as stated by the Commerce Department.
This regulatory action is part of a wider strategic competition between the United States and China, two of the world’s largest economies. Both nations are vying to secure supply chains for future key computing technologies, ranging from semiconductors to AI software. Chinese manufacturers have been investing heavily in the connected car market. US officials have expressed worry about the penetration of Chinese manufacturers in Europe.
Previously, CNN reported on the Chinese government’s concerns about the data collected by Tesla (TSLA) vehicles, leading some governmental bodies to bar the vehicles from their compounds.
The Commerce Department’s proposed rule concerns “connected vehicles,” which broadly refers to modern cars, buses, and trucks that use network connections for features such as roadside assistance and satellite communication. The proposal covers hardware and software that interacts with key technologies, like Bluetooth, Wi-Fi, and cellular technology, that allow a vehicle to connect with the outside world.
The public will have 30 days to comment on the proposed rule. A senior administration official mentioned that the Commerce Department aims to issue a final regulation before the end of the Biden administration.
Reports also indicate that the Biden administration is set to release an economic analysis of the expected costs for automakers and consumers to comply with the new rule.
Secretary Raimondo denied that Monday’s announcement was a protectionist measure, which has been a charge made by Chinese critics. She emphasized, “This is not about trade or economic advantage. This is a strictly national security action.” She further explained, “If (China) or Russia, for example, could collect data on where the driver lives or what school their kids go to, where (their) doctor is, that’s data that would leave that American vulnerable.”
US officials are concerned that electric charging stations and other infrastructure equipped with certain hardware or software could be vulnerable to exploitation by hackers with affiliations to China, Russia, or other foreign powers. White House national security advisor Jake Sullivan stated on the conference call, “We’ve already seen ample evidence of the PRC pre-positioning malware on our critical infrastructure for the purpose of disruption and sabotage.” He added that the increased number of smart cars on US roads with vulnerable, Chinese-made tech “increases dramatically” the risk of disruption and sabotage.
The Chinese government, through spokesperson Lin Jian, has refuted the US allegations and criticized the US for “broadening the concept of national security and the discriminatory actions taken against Chinese companies and products.” They requested that the US respect market principles and offer a fair and transparent business environment for Chinese enterprises.
The Commerce Department is attempting to leverage its broad regulatory authority to protect US consumers from foreign-made software deemed a national security threat; this is the latest example of that effort. In June, the department banned the sale of products and services from Kaspersky Lab, a Russian cybersecurity firm whose antivirus software is used by hundreds of millions globally.
Supporting American Autoworkers
The proposed ban comes on a day when the White House also announced several new initiatives to support autoworkers, particularly in the key battleground state of Michigan — a crucial state for President Joe Biden’s victory in 2020. Vice President Kamala Harris’ campaign considers Michigan a must-win state in the upcoming election.
Additional initiatives announced by the White House on Monday include $1 billion in funding for small- and medium-sized auto suppliers, a new pilot program for training workers in the state’s most populous county for jobs within the automobile supply chain, and funding for more training for workers to install electric vehicle chargers, along with other initiatives across the state.
These moves are aimed at a critical group of supporters of Biden and Harris: Unionized auto workers in the Midwest. Last year, Biden became the first sitting president to visit a picket line during the United Auto Workers’ strike and has prioritized courting union members as part of his political messaging. Harris has also focused on that demographic and made several trips to Michigan after taking over the top of the ticket.
The White House fact sheet included a quote from Vice President Kamala Harris, promoting the programs but notably omitted any quotes from President Biden. “I believe in an economy where everyone has a chance to compete and a chance to succeed. Investing in the ambitions and aspirations of our people is the best way to grow the American economy and the middle class,” Harris said in the statement. She added, “Yet for far too long, we have seen lack of investment in communities across America and profound obstacles to economic opportunity—including in communities with historic manufacturing expertise such as Detroit.”
